TEXAS — CNBC ranked Texas No. 5 on its “America’s Best States for Business 2022” list. That contradicts Texas Gov. Greg Abbott’s frequent social media posts claiming the state is No. 1, but it’s worth looking closely at the metrics used to determine the state’s ranking.
CNBC measured all states on 88 indicators in 10 categories. These scores determined the ranking of the states.
“Each category is weighted based on how often states use it as a selling point in economic development marketing materials. So our research ranks states based on the attributes they use to market themselves,” CNBC staff explained.
LABOR FORCE
Texas was right behind Colorado, taking second place in the rankings. While Texas has an unemployment rate of 4.2% as of May 2022, Colorado has a 3.5% unemployment rate.
The workforce in Texas is overflowing with new bodies. “Our large, skilled and diverse workforce is one of the main reasons Texas is the best state for business. The robust workforce development and training resources available here are a critical factor in the high quality of life in Texas that attracts so many new residents and businesses,” according to the Texas Economic Development Corporation.
It also helps that the state offers low taxes as an incentive.
INFRASTRUCTURE
Texas, which ranked 14th in the category, according to a CNBC data analysis, has emerged as the top handler of U.S. cargo.
According to TxEDC, “the state’s infrastructure has resulted in it being the nation’s top exporter for 19 consecutive years; having more miles of public roads and freight railroads than any other state, at 313,220 miles and 10,539 miles, respectively; and boasts the #1 airport for a number of domestic destinations.”
However, if grid problems are one of the biggest concerns for Texans, it has certainly chipped away at the state’s infrastructure armor.
COST OF DOING BUSINESS
Texas ranked 12th for the cost of doing business in the state.
Operating costs are quite low in Texas, which gives entrepreneurs more advantages.
TxEDC said, “Texas is proud to be a right-to-work state and will continue to make strategic investments to ensure we maintain our competitive edge, allowing businesses to thrive and grow.”
ECONOMY
Gross Domestic Product (GDP) said Texas, ranked No. 8 in the category, was the world’s ninth-largest economy, with “annualized real GDP growth of 10.1% in the final quarter of 2021—compared to the national average is 6.9%, according to the Bureau of Economic Analysis,” TxEDC said in a March release.
LIFE, HEALTH AND INCLUSION
Of all Texas rankings, it ranks lowest at number 49. Governor Abbott has been campaigning hard for the gubernatorial election in November. And given recent events in Texas, Abbott has made his conservative-leaning agenda pretty clear.
Despite a succession of mass shootings at business establishments and public debate about improving gun safety laws, most Texas Republicans have opposed it. Abbott’s gubernatorial challenger, Democrat Beth O’Rourke, blamed the governor for his inaction on gun safety after the Uvalde massacre.
Also, with the recent Roe v. Wade case, Texas has taken what many believe is a regressive step back toward women’s health. Overturning Roe sparked fear among the LGBTQ+ community, with some thinking same-sex marriage was next on the coattails. Given that Attorney General Ken Paxton has been aggressively targeting trans youth in lawsuits aimed at fueling child abuse investigations into parents who provided children with gender assistance, this may not be too far-fetched.
According to CNBC Special Correspondent Scott Cohn, Texas has the highest percentage of residents without health care, no disability discrimination laws and is one of the hardest states to vote.
TECHNOLOGIES AND INNOVATIONS
Texas ranks 4th in this section, establishing itself as a global leader in technology. The huge industrial flexibility of Austin, Texas is that it is home to tech billionaire Elon Musk’s Tesla headquarters.
“More than 17,600 technology firms employ more than 203,700 employees, and companies like Apple and Wipro continue to grow every day. Texas’ long-standing technology sector has invented everything from semiconductors and the handheld calculator to a billion-dollar dating app,” according to TxEDC. “Texas ranks #2 in the nation for computer and video game employment with more than 13,600 people directly or indirectly employed in the industry.”
BUSINESS FRIENDSHIP
Ranked 34th, Texas has the foundation for small businesses to thrive just like the big players.
“Texas offers companies of all sizes and industries one of the best business climates in the nation with a fair, transparent tax and regulatory framework designed for business success,” according to TxEDC.
Each score is also associated with a letter grade.
